NHPC margin rebounds, but tax credit and other income drive Q4 profit
Revenue rose 19.96% year on year, yet faster cost growth and sharply higher depreciation pulled pre-tax profit down 74.36%.
Filed 15 May 2026, 21:11 IST · after market close · NHPC Ltd (NHPC)
Key takeaways
- Consolidated net profit rose 68.48% year on year to Rs 1549.42 cr, helped by a negative tax rate of -638.73%.
- Operating margin recovered 32.95 percentage points sequentially to 42.48%, but was 3.97 percentage points below Q4FY25.
- Other income of Rs 305.8 cr represented 107.13% of pre-tax profit, making reported earnings unusually dependent on non-operating items.
Price around the results
Revenue growth did not translate into higher pre-tax profit
Consolidated revenue grew 19.96% year on year, but expenses increased 28.87%, so operating margin narrowed 3.97 percentage points. Depreciation more than doubled to Rs 642.01 cr, while interest moved from a credit of Rs -12.09 cr in Q4FY25 to Rs 574.28 cr. These items drove a 74.36% year-on-year fall in pre-tax profit despite 9.70% growth in operating profit.
Sequential margin recovery was substantial but incomplete
Revenue increased 26.78% sequentially while expenses fell 19.39%, lifting operating margin by 32.95 percentage points from 9.53% in Q3FY26. The recovery followed a sharp margin drop from 60.23% in Q2FY26 to 9.53% in Q3FY26, leaving Q4FY26 below the Q2 level. NHPC's 42.48% margin was 7.29 percentage points above the 35.19% median for the 17 Utilities peers that had reported.
Q4 profit quality was affected by tax and other income
The negative tax rate of -638.73% reflects a tax benefit of Rs 1823.2 cr and materially boosted net profit relative to pre-tax profit. Other income contributed Rs 305.8 cr, or 107.13% of pre-tax profit, so the quarter's Rs 1549.42 cr net profit was not driven by operating earnings alone. The tax rate was 22.2% in the year-ago quarter.
The initial stock reaction was within NHPC's usual range
The stock rose 1.20% on the first trading day after the results and was up 2.90% after five trading days. The initial move was below NHPC's 1.63% median absolute reaction across its last eight results, during which it rose three times and fell five times. The results were filed after market close on 15 May 2026.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,816 cr | ₹2,221 cr | +26.78% | +19.96% |
| Other income | ₹306 cr | ₹273 cr | +11.99% | -6.07% |
| Expenses | ₹1,620 cr | ₹2,009 cr | -19.39% | +28.87% |
| Operating profit | ₹1,196 cr | ₹212 cr | +465.18% | +9.70% |
| Operating margin (%) | 42.48% | 9.53% | — | — |
| Interest | ₹574 cr | ₹310 cr | +85.10% | — |
| Depreciation | ₹642 cr | ₹457 cr | +40.60% | +103.98% |
| Profit before tax | ₹285 cr | ₹-282 cr | — | -74.36% |
| Tax | ₹-1,823 cr | ₹573 cr | — | — |
| Net profit | ₹1,549 cr | ₹321 cr | +383.29% | +68.48% |
| EPS (₹) | ₹1.45 | ₹0.22 | +559.09% | +70.59% |
Operating margin of 42.48% compares with a Utilities sector median of 35.19% across 17 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.20% | +1.17% |
| Next session | +2.96% | — |
| 5 sessions | +2.90% | +1.26% |
| 15 sessions | -3.63% | — |
| 30 sessions | +3.62% | — |
Volume on the results session was 1.41× its 20-day average.
What to watch
- Whether operating margin holds above 42.48% after the sequential recovery.
- Whether depreciation and interest remain below or above the Q4FY26 levels of Rs 642.01 cr and Rs 574.28 cr.
- Whether the tax rate remains negative relative to -638.73% and other income remains below or above 107.13% of pre-tax profit.